There is a huge demand for RoR work however from what I could see!
Yes. The past few years have been a very profitable time to be in
RoR. It's been mainstream enough to have high demand, but not
mainstream enough to have high supply. 
I was curious to know what the average hourly rate was for a RoR freelancer
based in Europe or America.
Highly variable, depending on exactly where you and your clients are
(cost of living, tech scene, etc.), your level of
experience/expertise, and what breaks you're willing to give to what
kinds of clients, if any. In the USA, it also depends whether you
mean on a "W2" (employee, albeit possibly temporary) or "1099"
(freelancer, consultant, or contractor) basis. Since you've already
been freelancing, you might know this, but forthe benefit of others:
employees get some taxes paid for them and may have additional
benefits, while "1099" people usually have to pay business licenses,
business insurance, etc. (I ass-u-me there are similar categories in
Europe.)
As for me, to tip my cards: on a 1099 basis, I am currently making
$110/hour (after an agency takes its cut), the least I've done Rails
for is $65 (years ago when I was just getting started in Rails
freelancing, and didn't think it worth haggling on price for a
four-hour "test drive"), and yet I still get recruiters offering me
$40 with a straight face. But then, I have nearly three decades of
software engineering experience in general.
taking on long term projects for 15-20 hours per week. 2-3 projects at one
time will full my week.
That's great for stability, if you can get it. My clients usually
want me full-time, except one who pops up with a day or two's worth of
work every several months or so. However, I'm not sure if that's the
nature of the Rails market (I haven't done much other freelancing), my
clientele, or what.
I currently work remotely from Ireland.
So I take it you're not the Michael Houghton I know from near
Washington DC. Or have you moved?
I was just wondering if anyone has moved over from say PHP to RoR
and if they have found that they are able to achieve higher hourly rates?
I didn't move from PHP (mainly from plain old C), but I would think
yes, your rates would go way up, due to vastly lower supply.
